TaxTMI 
TaxTMI 
2023 (6) TMI 819
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....ing Officer on royalty income from hybrid cotton seeds as not developed directly by the assessee company. 2. Whether on facts and in circumstances of the case and in law the Ld. CIT (Appeals) has erred in deleting the disallowance u/s 80IB(BA) on account of miscellaneous income of Rs. 3,92,972/- as not derived from the operational profits, by the Assessing Officer." C. O. No. 116/DEL/2022 : 3. The assessee has raised the following ground of appeal : " Order of assessment dated 14.01.2015 passed in the name of M/s. Bioseed Research India Ltd. Is invalid and not sustainable under law as above-named company had amalgamated with DCM Shriram Ltd. Vide order of High Court dated 22.03.2013k w.e.f. 01.04.2013 and, accordingly, the order was passed in the name of non-existent entity." 4. There is delay of 63 days in filing of Cross Objection No. 116/Del/2022 by the Assessee. The assessee in the application for condonation of delay, pleaded that there was no notice issued to the assessee on the appeal filed by the Revenue and the assessee came to know of fixation of above appeal through cause list and appearance has been made by the representative of the assessee a....
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....s 143(3) of the Act against the non-existent entity on 14.01.2005 and the said order of the AO has been confirmed by the ld CIT(A) which is illegal and arbitrary. 8. On the other hand the ld DR has relied upon the order of the AO and submitted that no error has been committed in passing the assessment order against the assessee. Further submitted that assessment order came to be passed on 14.01.2015 in the name of M/s. Bioseed Research India Ltd. (since amalgamated with DCM Shriram Limited), the representative of the Assessee has appeared and participated in the assessment proceedings, submitted the details, further the A.O. committed no error in framing the assessment order, thus the C.O. filed by the Assessee is devoid of merit. 9. We have heard the parties and perused the material. It is found from the record that the case of M/s. Bioseed Research India Ltd was selected for scrutiny under CASS. Notice u/s 143(2) of the Act was issued on 08.08.2013 on which date M/s. Bioseed Research India Ltd has already been amalgamated with M/s. DCM Shriram Ltd. in view of the order of the Hon'ble High Court dated 22.03.2013 in the Company Petition No. 46/2013 connected with Company Appl....
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.... as under:- "6.5 I have considered the facts of the case, finding of the AO and submissions of the appellant. I have also gone through the contentions of the Assessing Officer in the assessment orders passed in respect of Assessment Year under appeal as well as in earlier years. In the assessment order passed for year under appeal, the Assessing Officer has referred to the stand taken in earlier years and also, the order of CIT(A) in appeal for AY 2010-11. CIT(A) while deciding the appeal for AY 2009-10 has also specifically examined the clauses of the Agreement entered Into by the company with the MMB and has specifically reproduced clause 2.5(a) In his order wherein it has specifically been provided that the company can market its own product without using the technology of MMB and can also market the product after using the technology of the MMB. The aforesaid clause makes it quite clear that, the company has itself developed the hybrid seeds for cotton and the technology of MMB was used by way of one Bt gene being transgressed in the cotton seeds for Increasing the Insect tolerance In the cotton hybrid seed developed by the company. Even before the aforesaid agreement ....
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....ot be said that company was not carrying out research activity for BT cotton hybrid seeds. 6.6 Considering the above facts, the AO is not justified in not allowing deduction u/s 801B(BA) of the Act to the appellant holding that royalty income in respect of cotton hybrid seed was pursuant to technology received by it from Mahyco Monsanto Blotech (I) Ltd. (MMB) and accordingly it was not carrying on research activities in regard to cotton hybrid seed. The appellant has furnished details in support of research activities carried out by the appellant including hybrid cotton seeds and also furnished production details of hybrid seeds. It has also furnished the detail of crop wise break up of royalty income from SBG for the FY 2011-12. The detalls given in respect of research activities in annual return submitted to the prescribed authority and also furnished details of royalty income earned during the year, it is evident that royalty income has been earned not only in respect of cotton seed in relation to which Monsanto technology was taken but also in respect of other hybrid seeds. The other products for which royalty has been received by the appellant company had been developed by ....
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.... that the miscellaneous income of Rs. 3,92,972/- derived from operation profit therefore, deleting the disallowance u/s 80IB (8A) is erroneous. The Ld. AR relied on the findings of the CIT(A) and submitted that order of the CIT(A) requires no interference. 18. The Ld. CIT(A) while deleting the disallowance held as under:- "7.2 I have considered the facts of the case, finding of the AO and submissions of the appellant. The addition is related regarding miscellaneous Income of Rs. 4,01,391/- credited to Profit & Loss Account in respect of which the Assessing Officer has observed that same are not in the nature of business income and therefore will not be eligible for deduction u/s 801B(8A) of the Act. I called for Itemwise details of the aforesaid income which have been duly submitted by the appellant company during the course of appeal. The aforesaid income of Rs. 4,01,391/- consists of following items of income: AMOUNTS (Rs. ) Description 1,91,178/- Contribution received from ICRISAT towards expenses incurred for research for Collaborative Research Activities 181,794 Contribution received from ICRISAT towards expenses Incurred for research for "Genetically e....